Why Cities Live forever and Companies Die a lot and faster ?
Because as companies grow they are captured/dominated by bureaucracy. In a big city there is a lot of crazy people. In a big company all the crazy people are fired and replaced by organized and reliable people.That is why companies die a lot. Predictable people do predictable & boring things.
Lifespan of Large Companies, Richard Foster
http://edge.org/conversation/geoffrey_west-why-cities-keep-growing-corporations-and-people-always-die-and-life-gets
From John Brokman
The great thing about cities, the thing that is amazing about cities is as they grow, so to speak, their dimensionality increases. That is, the space of opportunity, the space of functions, the space of jobs just continually increases. And the data shows that. If you look at job categories, it continually increases. I'll use the word "dimensionality." It opens up. And in fact, one of the great things about cities is that it supports crazy people. You walk down Fifth Avenue, you see crazy people. There are always crazy people. Well, that's good. Cities are tolerant of extraordinary diversity. ...
This is in complete contrast to companies. The Google boys in the back garage so to speak with ideas of the search engine, were no doubt promoting all kinds of crazy ideas and maybe having even crazy people around them.
Well, Google is a bit of an exception, because it still tolerates some of that. But most companies start out probably with some of that buzz. But the data indicates that at about 50 employees to a hundred that buzz starts to stop. A company that was more multi dimensional, more evolved, becomes uni dimensional. It closes down.
Indeed, if you go to General Motors or you go to American Airlines or you go to Goldman Sachs, you don't see crazy people. Crazy people are fired. Well, to speak of crazy people, is taking the extreme. But maverick people are often fired.
It's not surprising to learn that when manufacturing companies are on a down turn, they decrease research and development, and in fact in some cases, do actually get rid of it, thinking this is "oh, we can get that back in two years we'll be back on track."
Well, this kind of thinking kills them. This is part of the killing, and this is part of the change from superlinear to sublinear, namely companies allow themselves to be dominated by bureaucracy and administration over creativity and innovation, and unfortunately, it's necessary. You cannot run a company without administrative. Someone has got to take care of the taxes and the bills and the cleaning the floors and the maintenance of the building and all the rest of that stuff. You need it. And the question is, “can you do it without it dominating the company?” The data suggests that you can't.
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